Mounting evidence suggests that synaptic function is severely compromised in Alzheimer's disease and other dementia diseases, leading to cognitive defects even during the early stages of these diseases. It is well known that protein phosphatase-1 (PP1) plays a critical role in synaptic cognitive functions. PP1 is dubbed a molecule of forgetfulness. Despite the critical importance of PP1 in synaptic plasticity and cognition, how PP1 activity might be controlled in cognition has remained unclear. Our preliminary studies suggest that inhibitor-2 (I-2) is a critical endogenous PP1 binding protein in hippocampus and cortex, regulating PP1 activity and function in synaptic plasticity and memory. Specifically, we found that I-2 is necessary for the induction of NMDA receptor dependent LTD and performs important functions in basal synaptic transmission as well. Moreover, we found that I-2 constrains memory formation based on our studies in a mouse model in which one copy of I-2 gene was deleted and in studies of rat injected with lentivirus to knockdown I-2 in rat hippocampi. Interestingly, both our biochemical and behavioral studies indicate that the I-2 mainly functions as a positive PP1 regulator, despite its name, in regulating neuronal communication and memory formation. In this proposal, we propose three aims to define I-2 mechanisms in regulating PP1 activity and CREB inactivation (Aim 1), synaptic transmission (Aim 2), and synaptic plasticity (LTP/LTD induction) and memory formation (Aim 3). We will use molecular replacement studies to determine the structural basis of I-2 in positively regulating PP1 activity (Aim 1), synaptic transmission (Aim 2) and memory formation (Aim 3). Our proposed work will define the mechanism by which I-2 positively regulates PP1 activity in neurons and the in vivo relevance of this regulation in key forms of synaptic plasticity as well as in memory functions. This information will help clarify the field of synaptic function, memory and cognition and will also provide a novel target for therapeutic intervention in in treating dementias.